Renesas to close major chip plant in Tohoku region

Struggling chip-maker Renesas Electronics Corp. is looking to close or shrink its major production base for system LSI chips in Tohoku after failing to sell it to a Taiwanese firm, company sources said Saturday.

Renesas had been trying to sell the Tsuruoka factory in Yamagata Prefecture since last July, but negotiations with Taiwan Semiconductor Manufacturing Co. failed to reach terms, they said.

The plant produces cutting-edge system LSIs, widely used to make digital electronics products, but has been suffering from sluggish demand for use in home video game consoles.

Renesas plans to deal with the more than 900 workers at the plant via early retirement and transfers, the sources said.

The company is to receive a combined ¥150 billion in investments by the end of September from Innovation Network Corp. of Japan, the government-backed corporate turnaround body, and eight key clients, including Toyota.